Big Question:
What factors are likely to influence a consumer´s demand for mobile phones. Outline the factors that are likely to influence the producer´s supply of mobile phones.
Due in on Thursday 25th of October. At least 150 words. No lists (!) and full sentences please. Use examples and please apply your answer to the question.
Good Luck.
Mr Wickham.
Factors that affect Demand and Supply for mobile phones
ReplyDeleteWhat is demand? Demand is the amount of something someone is able and willing to buy over a given period of time. This means that for there to be demand you must not only want it but you have to have the money to buy it. Many things affect Demand like price, advertising, substitutes, income and some others which I will explain later.
On the other hand we must also look into Supply and to do this we must know what Supply is. Supply is the quantity of something a supplier is willing and able to Supply over a given period of time. So it is like Demand but from the suppliers view, and so as in Demand many factors affect Supply like, you guessed it; price, subsidies productivity and some others that I will explain later.
For somethings as mobile phones Demand is a constantly changing and that affects Supply as well and vice versa, for example when a new mobile phone comes out it has a very high price and therefore little are supplied but as time passes and price falls the quantity demanded is increased and the Supply is also increased. In that case we saw a change in price and its effects this is called movement along the curve because both the items price and the quantity demanded or supplied changed.
We have looked at the changes when both factors change but it can also happen that at the same price the quantity demanded or supplied changes this is called a shift this is caused by a change in any factor but price for example substitutes these are two different products which do the same function. For example lets imagine that telephone A does the same things as telephone B, if we raise the price of telephone B less people will want to buy it and the Demand for telephone A will rise without changing the price of the telephone itself. As well as having substitute products we also have complementary products these are products that require each other to be useful. For example if we created a telephone app that could make free phone calls and connect to a free internet network which would only work on telephone A everybody would want to buy the telephone. fashon, trends and advertising are very importabt factors when speaking about Demand, if someone famous is seen with telephone A people would want to buy it just to look like the famous person, also if an advert is repeated over and over again at the adequate time people are more likley to buy the product adverised. Income is also very important because as I said before to be demand you have to be able to buy it so if incomes are reduced for the same price people will buy less telephone A, but if incomes get higer at the same price people will buy more telephone A.
As I said before Supply is also very important for basicly any product, as I already spoke about cahnges in price (because they are nearly the same as in demand but with a direct relationship) I will go directly into things that shift the Supply. the most important thing( i my opinion) is productivity, productivity is the speed at which you can produce a product, so eaven if you try very hard you are not going to produce over you production limit but if this one goes up because you set up a new fabric on the other side of the street you cand double your productivity, also is your emploies become very good at making telephones you will be able to supply more. Another factor that shifts supply are subsidies, as I said before to produce more you must increase your productivity, but how are you going to pay it? with subsidies if the govenment sudenly decides that there are not enough telephone A in the shops they will give you money in the form of subsidies so that you can you can produce more.
by Javier Silva
The factors that are likely to affect the consumer´s demand for mobile phones are many but price is the main big factor. Mobile phones have become very important for people in the 21`st century. The majority of teenagers have a mobile phone and use it loads on their day a day life. Consumers are always looking for the best looking phones with the new technologies as well as having an acceptable price. Teenager usually also go asking for phone which can text message and chat with friends. For example when the mobile phone first comes out it has a high cost but over the time technologies advance and replace the one the old mobile phone had and so demand goes down so the cost goes down.
ReplyDeleteThe first and most important factor is the price of the mobile phone, this depend on if it has the newest or oldest technology, the storage capacity and if it is touchable. The more capital it cost´s the lest demand there would be and the lower the price the higher the demand will become.
Secondly, another factor would be text messaging (for teenagers). Text messaging is an ability of mobile phones that doesn't exist with traditional phones. This added feature makes them preferable to land lines for many people, given the flexibility of sending messages at any time, and accessing them when it is convenient for you and for the person you are texting to. Texting also appeals to people who don't enjoy speaking on the telephone, and is useful in environments where speaking loudly and taking phone calls is not appropriate.
Another factor could be advertising, for example putting an advert on internet or on tv announcing amazing and new characteristics of the phone. And using 2 x 1 offers or 20% off for example. This would increase the demand loads as many people wouldn’t know about the mobile if the advert wouldn’t have been made.
About supply there are also some factors that will change the supply of the producer like for example changing the price of other goods and services which compete with that good or product like play station and Xbox. The fall of the price of one causes producers to cut production and supply more of another product or service.
Taxes and subsidies is another that can make a big difference on the supply of a good or service. Taxes can be regarded as an additional cost of production while subsidies help offset costs. When taxes come you are probably going to reduce the productivity of goods and services as you have to pay an extra money for producing it and if some taxes go down, you are going to try to make the most of that good.
Another supply factor could be a big technological advance. Technical progress can mean improvements in the performance of machines, employees, methods, production quality… This allows more to be produced , often at a lower cost, regardless of the price at which the product is sold.
In conclusion, I think that there are many factors which can change people’s demand about mobile phones. Many are going to make people buy more and so demand more like advertising. In the other hand there are also factors can make people think the opposite and so less demand like for example adding another 20% of money value to the mobile phone.
The first thing you need to know to be able to answer to this question is the definition of demand. Demand is a want for a good or service supported by the ability to purchase it. Demand can be influenced by a myriad of factors depending on the specific product. For example, demand usually moves due to changes in price and shifts due to changes in population, advertising, substitutes, income, fashion and taste, income tax and complements.
ReplyDeleteTo create a movement along the demand curve the factor that affects this is price, in this case when a mobile phone gets expensive enough that the average consumer no longer feels it is worth it to buy the phone, then the demand decreases. Whilst when the price of the phone decreases the quantity demanded increases this is known as an inverse relationship, when price increases quantity demanded decreases or vice versa for this example when price increases and quantity decreases it is known as contraction of demand
We have now looked at the factor affecting movement along the demand curve although to create a shift along the demand curve there are other factors as said at the beginning. Although in this example there are factors that would create a bigger impact. An example can be the Advertising of the mobile phone advertisements on television; Internet and radio have an effect on demand in that they make more people aware of the availability of a product. People do not buy what they don't know is for sale.
Another good factor is Substitutes which are products that perform similar functions. For example in this case if Blackberry’s increased in price there can be alternative options like Samsungs, if a type of phone increased in price the consumers can have the choice to choose another type of phone at a lower price and with the similar functions. Fashion and taste is another very important factor. Economists recognize the importance of consumers’ personal tastes as a factor that influences demand for goods and services. In this case a consumer would prefer buying a different type of phone according to its personal taste for mobile phone. Finally another very impacting factor is Incomes. Suppose you receive a pay raise. If you’re like most consumers, your spending will increase, meaning your demand for goods and services increases. On the other hand, if you lose your job, your demand for anything other than necessities will likely decline.
On the other hand we have supply which can be defined as the quantity that a producer is willing and able to produce at different prices over a period of time.
Although in this case supply is different from demand as it has a positive relationship as when price rises quantity supplied also rises, an example can be if the price of a mobile phone rises the quantity supplied also increases this is determined as a extension in supply.
A market is where the forces of demand and supply allocate resources. Where the demand and supply curve meets is called the equilibrium.
In order to create a shift in supply there are various factors, they are productivity, indirect taxes, number of firms, technology, subsidies, weather, costs of production.
A very impacting factor in the case of mobile phones is technology, depending on the quality of the technology of the phone more or less people would prefer to buy it. Another factor are subsidies, if government decides to subsidize a good, there will be more profit for producer. If there are not selling enough mobile phones the government would give you some subsides to produce more. And finally the Indirect taxes, if the government increases the taxes that it takes from producers, there will be reduced profit therefore less supply.
Factors that could affect demand for a mobile phone
ReplyDeleteDemand is the want or willingness of consumers to buy goods and services. There are a few factors that would affect the demand for mobile phones, which would make us want to buy a mobile phone or make us take the decision not to buy a mobile phone. Some of these would be advertising, fashion and taste, changes in people’s income and substitutes.
Advertising would make a change in demand because an advert would mean more people knew about the mobile phone and when they see a product being advertised, it makes people want to buy them. It also reminds people about the product and the price of the product.
Fashion and taste is a big influence on demand, as if a certain mobile phone of a certain company, such as an Apple iPhone, suddenly becomes more popular than another type of phone, say a Samsung Galaxy, and everyone wants one, the demand for the iPhone will increase dramatically. Also if all of a sudden no one likes the iPhone anymore and people start buying Samsung Galaxy‘s, the demand for the iPhone will decrease.
Demand is a willingness to buy a product backed by an ability to pay. If you want to buy a mobile phone but do not have enough money, you will not be able to get it. Therefore if people’s income rises they will be able to buy more products and so the demand for products will go up because more people will be able to buy them. If people’s income decreases, demand for products will decrease as people will no longer be able to afford those products.
A mobile phone is a good example of a substitute good, because its purchase can replace the want for another good or service. For example if the price of iPhone’s increases, there might be a rise in demand for Samsung Galaxy’s, as people may not be able to afford the iPhone or don’t want to pay too much money, and so switch and buy a Samsung Galaxy.
Factors that could affect supply for a mobile phone
Supply refers to the amount of a good or service firms or producers are willing to make and sell at number of possible prices. If people demand more mobile phones, supply for them will increase. Some factors that would affect supply for mobile phones are productivity and the cost of production.
Productivity is an important factor because if you can use your employees to produce more mobile phones than usual, your productivity will increase and therefore so will your supply. Productivity can be affected by division of labour and specialization, if workers focus on one job there will be a lot more productivity.
Cost of production is also an important factor because a rise in cost of production will meant that there will be will be a decrease in the supply of this product, as there is an inverse relationship. For example, if there is a shortage of raw materials used to produce mobile phones, or if workers’ that make mobile phones wages increase, then the supply will decrease as as much money as possible must be saved.
Demand & Supply
ReplyDeleteBig Question:
"What factors are likely to influence a consumer´s demand for mobile phones. Outline the factors that are likely to influence the producer´s supply of mobile phones."
Owning a mobile phone is an essential product used today by millions of people. Most adults own a mobile and more and more teenagers are getting them, the number of companies producing mobile phones is increasing all the time as technology advances and mobile phone providers are also getting larger. Because there is so much competition between producers and network providers consumers are able to search out the best possible deals available covering the network, mobile phone contract and their actual software. Text messaging was also introduced to mobile phones which didn't originally exist with traditional phones. As newer mobile phones models became more sophisticated many of them had access to the internet and began to offer applications to download on your phone more and more people discarded their older phones in favour of a newer model.
Network providers have a large impact of the consumer’s demand of a mobile phone. Some consumers are more likely to give their custom to a well-established network e.g. Vodafone since it is a well-known provider and may be less likely to give their custom to a less well known network such as Carrefour mobile. The choice of network may also be determined by the existence of special deals such as internet tariffs.
One of the main factors that increase the demand for a product is advertising. Advertising may cause a shift or movement in the demand curve. Telling your buyer that there is a 10% off offer during the month on November means that there will also be more of that product demanded as the buyer knows he is getting a discount for a limited period of time.
Another factor that affects the demand of a product is competition within the mobile phone sector. Companies like Samsung and Apple have similar products at different price ranges. If a company releases a new product provided that there is good marketing demand could be substantial.
There are limits to what people are willing and able to pay for a mobile phone. Depending on how much the product cost and is subsidised by the networks the more affordable the phone is.
Demand and supply
ReplyDeleteMobile phones are a good that we use every day and nearly everyone has access to them. But still, there are certain variables that may cause the mobile phones to sell and be produced at a higher rate. These involve a change in demand and supply.
Demand is the quantity of a product or service is desired by buyers. There are some variables which may cause this quantity to increase such as advertising. Advertising is a very important role in the mobile phone industry as every firm is trying to compete in order to get more customers. Advertising the new “iPhone 5” is a way of selling the product and making the population increase its demand for it. so, for example, if I want to sell my new mobile phone, I could post an advert in any media-form, such as the television or the internet, and people will be willing to buy my phone as people have been able to see and reach it and my demand, which is the number of people wanting to buy your product, will become greater.
Income is the money left at the end month, in other words, the money people can spend on new items after paying taxes, mortgage... and plays a very important role in the mobile industry as, the higher the income, the more money people can spend on your new “Samsung Galaxy”. This makes your new phone be sold at a higher rate over a smaller period of time.
Fashion is something that the whole population is inspired and affected on as when something is fashionable people tend to go with the “flow” and end up buying the “fashionable products” which in this case may be your new phone. If you make your phone fashionable (such as by advertising) people would want to have the newest and coolest items, and will certainly want to buy your product.
As there was mentioned before, the mobile industry is a very modern, and competitive business, so the less competition you have, the more costumers you are going to have. What happens is that if you are “Apple” and “Samsung” has lowered it price in its new phone then, people will want to buy the cheapest one and this will decrease your demand. Although, you can lower the competitiveness by making you product “unique” such as making the first phone with a new camera in 3D, this will lower the competition for the rest of the firms because you have created a product which is the only available at your firm and costumers that want a new, fashionable, 3D camera which means that they can only buy yours.
Supply is another part which affects how a product is produced and sold. Supply is the quantity that a producer is willing and able to provide at different prices over a period of time.
The more mobile phones you produce, the more supply there is as you can fix your price depending on the demand. This means that you can change your price in order to obtain more benefit from selling these. The productivity can increase by the division of labor or specialization or by having more employees at your firm making this new phone.
The costs of production are a very important factor in selling the phone as the higher it costs you to make the phone the less benefit you will obtain form it (probably), unless you put the price up of tour new “HTC” for example, although this may lower your demand. The less it costs you to make the phones the more you will be able to sell and this will cause your supply to increase.
Demand is the want and ability to purchase a good or service.
ReplyDeleteA mobile phone is an essential good as it is used in our daily life. There are many factors the influence people's demand for mobile phones, but i would say advertising is the most important one. This is because usualy, consumer want what they see advertised in the TV, magasin... Firms compeat between each so their product (in this case a phone) is selled the most. For example if the new iphone 5 came out, and it wasn't advertised people wouldn't know about it, and wouldn't buy it. While a new samsung has recently come out to the market. The firms will have this product advertised every were and every one wwould like to buy it, as it's the newest thing and it's got a good advert, that convinces people to buy the new samsung.
Money also has a big influence on demand, as demand is not just wanting a product, but having the ability to buy it. I f prices got to high one the new iphone 5, although many peope would want to buy it not everyone would be able to. This is called inverse relationship, as price goes up, the quantity demanded will fall. So if the iphone 5 costs about twice the samsung, people will buy the samsung. Both mobile phones are very similar in many things, but one costs double the other. Phones are necesary in most of people's life, so if for any reason the population grows, more people will demand phones and so the quanntity demanded for this product will increase. Demand for mobile phones can be also influenced by the fashion and tastes of the time. For example blackberrys. They are just normal bussiness man's phones. They had been out in the market for many years, but later on they started being fashion, and everyone wanted them. Konw people stoped buying them because samsungs, andiphones have started to be the fashion, what everyone wants.
The last thing i would say affects demand is income tax. When goverments increase the income tax, consumers have less money to buy products such as mobile phones. The people will not be able to purchase certain products such as mobile phones so thiere demand will decrease. Although as i mentioned before it's and inverse relationship, and if the income tax decreases the quiantity demanded fot mobile phones will increase.
The supply of a product is the quantity that a producer is willing and able to produce at different prices over a period of time. This may be influenced by th cost of production of the mobile phones. If the tecnology needed, the material needed, or the workers that help produce the mobile phone increases, firms will supply less. This is because the cost is going to be higher andthey will not be willing to produce as much mobile phones as before. Supply may be increased by the cost at which the phones are seld increases. The firms will win more money because know they are selling the phone, say ay 300 euros, amd producing it at 100 euros, while before they sold it at 200 and made ir for 100 euros. Thsi is a complementary relationship. If price rises quantity supplied increases, and if price decreases, quiantity supplied decreases to. Also when indirect taxes increase, you are likely to produce less as it's costing you more to produce it.On the other han we have subsidies, which help the cost of producin mobile phones. Productiviy may also affect supply, because if worker work quicker and make mor mobile phones in less time, the firms are going to be able to supply more of them. When the number of firms producing mobile phones rise, the supply also rises. This is because there will be more of them suppliying the phones.
Now a days mobile phones are essential for our every day life, majority of adults already have a cell phone and the age to give children a mobile phone is lower every year.And so there is a huge and increasing demand for mobile phones, as years pass mobile phones are getting better and cheaper. The factors that afect the consumer`s are way different as different consumers want different things.
ReplyDeleteOne of the main factor that influences the demand of the consumer for a mobile phone is mainly the price, as normally consumers such as teenagers want a mobile which is mainly cheap so they can aford it and but in the other hand adults for example may have a higher income and so can afford a more expensive phone. Another factor that influences the demand is the substitute that phone can make , for example a mobile with a camera integrated may substitute a camera ,as buying both a camera and the mobile phone is more expensive than simply buying the mobile so this mobile with camera will in consequence increase the demand for phones with a camera ,that will then reduce the demand for cameras.Others are advertising, income, loyalty…
Then there is the factors which influence the producer´s supply of mobile phones which are labor, capital and entrepreneurship. For example, the supply of phones may be expected to increase if more people are employed producing them and the more people and machines are available to make the phone. Similarly, more phones can be supplied if additional factories are devoted to producing them.Another may be the tax increase that will normaly limit the supply of these as they are costing more to be produces And if price rises quantity supplied increases, and if price decreases, quantity supplied decreases to.
Nowadays, almost every person has a mobile phone. This could mean that mobile phones are becoming essential for some people, so it can have big changes and effects in the economic system (demanding and supplying) depending on several factors.
ReplyDeleteWhen there is more people, it means that there are also more people who needs a mobile phone, so this can have a good effect in demanding. But if it is the opposite case, then the consequence is opposite also. This factor can be summarized in one word: population.
Population is a factor being depended by other factors. For example, fashion and taste of people affect the demand of mobile phones. If people prefer mobile phones of company A than company B, this means that company A would gain more profit. But there can be two mobile phones from different companies which have the same functions and technology but different prices: this means that the phone can have substitutes, and this causes people give up one and choose the cheaper one. The factor of fashion and taste also depends on advertising, apart from population. If the advertising of mobile phones of company A is persuasive and makes people want to buy it, this makes the company have more buyers and increases the demand.
Population is also depended by incomes. If a person has an amount of money left after paying services like electricity cost, education, VAT, etc, this amount is called the income or disposable. If a person has more income, that person can buy more mobile phones or a more expensive but better one.
The demand in mobile phones also depends on other complements, for example, the price of calling and messages. If price of calling increases, then people will use mobile phones less than before, so then some people would not buy them anymore.
Mobile phones does not only depends on the buyers, but also the people who supply them. We must also concentrate on the production of the mobile phones.
As said before, there is not only one company which supplies mobile phones: there are lots of firms which compete between them. This really affects the supply of mobile phones because if there are more firms, then probably less buyers will bye mobile phones from your company. But this problem can be solved depending on the quality and technology of your mobile phones. If the technology and quality is better and more advanced than other mobile phones, then more people would want to buy it so this means you can supply more.
There are other factors which can affect the amount of mobile phones that you produce, for example, the weather is important at the start of the cycle of production. It can affect the raw materials which you take out to produce mobile phones, such as wood, sand, oil, etc. Another two factors that affects the supply are the cost of production and the subsidies: the cost of production is very important as it really affects the amount that you can produce and the profit you can gain, for example, if the cost of production is very high, then you produce less mobile phones and you supply less and then gain less profit. Subsidies are really helpful as it can make you supply more.
Factors that affect the demand and supply on mobile phones
ReplyDeleteNow a day’s high percentage of the population has a mobile phone, and most of the people would describe it as something essential in life. Demand is a want for a good or service supported by the ability to purchase it; it is not good only wanting it! There are different factors that can affect the demand for mobile phones.
A change in consumer’s incomes is a factor that could affect the demand on mobile phones. As if incomes rise consumers will be able to buy more, this would cause demand to rise and if there is a fall in incomes consumers will buy less which would cause demand to fall. The prices and availability of other goods and services also can affect the demand on mobile phone. Mobile phones have different complementary goods that are joint in demand. Another factor that can affect the demand on mobile phones is the changes in taste, habits and fashion. The demand of mobile phones change because of the changing tastes of consumers. Population is also a factor that could affect the demand of mobile phones. Clearly the higher the population the higher number of people demanding mobile phones. Finally another important factor that can affect the demand on mobile phones is advertisement. The more the mobile is advertised with a link between the mobile and the consumer the higher the demand in that mobile phone.
The supply of a product is the quantity that a producer is willing and able to provide at different prices over a period of time. There are different factors that affect the supply on mobile phones.
The technology is one factor that affects the supply of mobile phones. Technology has advanced a lot during the last 30 years and the improvements in machines, production methods, and product quality… have allowed more mobile phones to be produced at lower costs, this causes the production of mobile phones to be more efficient. Changes in the cost of factors of production also affect the supply of mobile phones. The higher the cost of production of your mobile phone, the less supply you will have as you haven’t got enough profit to supply more mobile phones. Finally productivity also affects the supply of mobile phones as the more you produce the more mobile phones you are going to be able to supply.
Andrea de Cruz 10N
Hi everyone. Well done, some very detailed and lengthy answers here. Generally i wanted you to mention all the factors that influence demand (P.A.S.I.F.I.C.S) and supply (P.I.N.T.S.W.C) as well as Price (of course!). Lots of you who got a C grade lost marks by not using these economic arguments (as above) and relying on general knowledge.
ReplyDeleteThose with higher grade applied these factors well to the question.
here we go:
Javier B
Good detailed answer. Needed more explanation of supply factors.
Maggie C
A good try but too general knowledge for a higher grade.
Paula B
Good answer but needed more about supply factors.
Marta A
Excellent answer. Good definitions and clear discussion using the economic factors.
Well done everyone!
Diego B
Good answer but you needed to keep your answer closer to economic arguments for a higher grade. for example, why is texting an important feature in terms of economics? fashion and demand or technological advances and supply?
Carlos A
Excellent answer. Good clear analysis. Well done.
Patricia B
An excellent answer of demand but you lost marks on the supply factors. Too brief, more detail needed.
Sophie C
You have not covered the main economic points and have lost marks with a general knowledge style answer. (PASIFICS / PINTSWC?)
Cristina B
Good but not enough about Supply for a higher mark.
Sonia A
An excellent answer.
Jose C
Not a very clear answer. You have rushed your explanations and not defined demand or supply at all. You needed to have spent more time on this answer Jose. You can much better than this.
Liliana B
A good answer with most of the main points included. The introduction could have been better, setting out your answer which would have flowed better. You could have stated the factors that effect Demand and Supply (as well as price) and then gone on to explain them.
Andrea A
Excellent answer.